NEC 4 CL 63.4 Option B

NEC3 and NEC4 Contracts Compensation Events
1

Hello, I am having some back and fourth with a main Contractor (me being the sub-contractor) regarding a proposal from them.

The Scenario - there is a material which we have agreed mixes for and are currently installing, however the main contractor has a surplus or potentailly hazardous material that we can encaspulate with a new mix design. They are proposeing to instruct us to use that material as a change under 60.1(1) and believe that they should recieve a credit back as part of the CE for the saving inccured by the contractor for not having to purchase the virgin aggregates for the proportion of the mix that is taken up by their waste material.

It is not VE as the Sub-contractor has not proposed it, therefore I think there is no reduction under 63.3, however they beleive that this meets the criteria of 63.4 bullet point 1, which I disagree with.

Hoping someone might be able to share some view on this thank you.

2

Hi Mathew,

clause 63.3 does not only apply to VE under clause 16, it applies wherever the contract allows the Prices to be reduced, therefore the Contractor is correct. Under 63.4 any change to the Scope other than a change proposed by the Subcontractor, allows for a reduction in the Prices. Reducing the Prices due to a clause 16.1 proposal is dealt with differently by each main Option.

The assessment of the change to the Prices has to be assessed in accordance with clause 63.1, i.e. a forecast of the Defined Cost of the material which you are no longer required to purchase plus the Fee.

The BOQ is changed in accordance with clause 63.15.

I hope that helps but happy to discuss further if I have miss interpreted your query.